Lease's Double-Rent Holdover Clause Is Enforceable

May 31, 2007

A tenant was paying a monthly minimum rent of $1,815. The tenant wanted to renew its lease, but the parties could not reach an agreement on the renewal. After the lease expired, the tenant stayed in the space for four months and paid $2,206 per month. The owner then sued the tenant, claiming that, under the lease's holdover clause, the tenant owed double the minimum rent for the four holdover months. The tenant argued that by doubling the minimum rent, the holdover clause was an illegal penalty.

A tenant was paying a monthly minimum rent of $1,815. The tenant wanted to renew its lease, but the parties could not reach an agreement on the renewal. After the lease expired, the tenant stayed in the space for four months and paid $2,206 per month. The owner then sued the tenant, claiming that, under the lease's holdover clause, the tenant owed double the minimum rent for the four holdover months. The tenant argued that by doubling the minimum rent, the holdover clause was an illegal penalty.

An Ohio appeals court ruled that the lease's holdover clause was enforceable. After noting that courts in other states have upheld holdover clauses with double-rent—and even triple-rent—provisions, this court reasoned that a double-rent provision for a holdover tenant “in a commercial lease was not, without more, an illegal penalty.” Rather, holdover clauses are legal as long as they bear some relation to the owner's actual damages, it added. Here, there was such a relation because the owner was not asking for double rent for a period beyond the time the tenant was actually holding over.

  • Brunswick L.P. v. Feudo: No. 2006-L-151, 2007 Ohio App. LEXIS 2018 (Ohio Ct. App. 5/4/07).

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